Riverhead Central Faculty Association shows support in bid to stop diverting school taxes

Riverhead Central Faculty Association participated in a press conference at the State Capitol in Albany last Wednesday along with two dozen other representatives of major unions, education associations, school funding advocates and government watchdogs.

The group called for the passage of state legislation that would put an end to local industrial development agencies from diverting tax revenue that would otherwise go to schools.

RCFA president Gregory Wallace took to the podium to highlight how those tax breaks have specifically affected Riverhead.

“Between 2014 and 2021, the Riverhead IDA has awarded more than $23 million in tax breaks for proposed developments throughout the Town of Riverhead,” he said. “The diversion of these funds has created an extreme fiscal burden on the school district by directly impacting the services we can provide to our students. Last year alone, $2.7 million was diverted from Riverhead Central School District by the Riverhead IDA, whose members are appointed and not elected. These funds are sorely needed to strengthen our educational and academic intervention programs, as well as mental health services.”

Mr. Wallace wasn’t alone. Riverhead Board of Education President Colin Palmer also added his support to the legislation through a written statement.

“The working residents of Riverhead had no say in whether or not these abatements are given, but we are all aware of the increasing tax burden. It’s time to pass this bill and make developers and other business interests pay their fair share.”

Mr. Palmer has been vocal in his opposition to the town’s IDA. He sent the organization a letter in September 2023, in which he said the school district had been “robbed” of over $15 million in revenue over the past decade due to the tax breaks.

The bill was introduced early last year by State Sen. Sean Ryan (D-Buffalo) and Assemblyman Harry Bronson (D-Rochester), both of whom attended the event last week.

“When we enable corporations to avoid property taxes that are meant to fund our schools, we’re saying that enriching shareholders matters more than New York State students and teachers,” Mr. Bronson said in a statement. “The common refrain in support of IDAs is that they stimulate business growth, but any supposed benefit is on the backs of our students.”

According to the bill, which includes a history of IDAs, the organizations were established in 1969. It notes that “they have offered billions of dollars of incentives [to] large multi-national corporations.” Since the data on job creation or economic benefits is self-reported to the state by the corporations themselves, “their exact effectiveness is unknown,” the bill proposal states.

In a January meeting of the Greater Calverton Civic Association, Senator Anthony Palumbo, who represents the 1st Senate District of Eastern Suffolk made a pledge that he would vote for the bill, should it make it to the Senate floor. If passed, the bill would immediately take effect.

The New York State Economic Development Council pushed back against efforts to diminish IDA activity through a report they released last fall.

The report states that in 2021, IDAs statewide helped create and retain 1.3 million jobs, which accounted for $141 billion in annual wages and generated $12.4 billion in state tax revenue. The report also claims that IDA projects created $830 million in new tax revenue to local taxing jurisdictions in 2021, which included $338.9 million in payments to school districts throughout the state.

The report was prepared for the organization by economic development counseling firm Camoin Associates. The state EDC is made up of over 900 members, which include the leadership of IDAs and local development corporations, commercial and investment banks, underwriters, bond counsels, utilities, chambers of commerce, higher education institutions and private corporations.

Officials from Riverhead IDA did not respond to emails requesting comment before press time.